Stewart v. Newbury
220 N.Y. 379, 115 N.E. 984, 1917 N.Y. 980, 2 A.L.R. 519

Facts:

Newbury hired Stewart to construct a concrete mill building. However, nothing in the contract specified the time or manner of payment. Stewart claimed the two had a conversation over the phone where they agreed to the “usual manner” of payment, but Newbury denied that ever happened. (The “usual manner” was to be paid 85% every month.)

  • When Stewart sent Newbury a bill for the first few months of work, they failed to pay, so Stewart stopped working.
  • That initiated the lawsuit.

Side Notes:

  • Stewart claims he stopped because Newbury forced him to (not built to specifications).
  • Newbury claims Stewart stopped because he wasn’t getting paid.

History:

  • The trial court ruled in favor of Stewart.
    • Absent an agreement respecting payments, Newbury’s obligation was to make payments at “reasonable times.”
  • The Appellate Division affirmed.

Issue:

Absent an agreement respecting payments, is a party obligated to make payments at reasonable times?

Holding:

No. Case reversed.

Reasoning:

  • When a contract is made to perform work and no agreement is made as to the payment, the work must be substantially performed before payment can be demanded.

Restatement: Where the performance of only one party will require a period of time (e.g., a promise to build a house), that party’s performance is a condition precedent to the other party’s performance, unless the language or circumstances indicate otherwise.